Regulatory Changes Give Transmission Planning a Boost

Renewable power faces many challenges in the quest for greater adoption nationwide. One that is often overlooked is the need for more transmission lines to accommodate all of the new electricity generated from wind, solar, biomass and other alternative-energy sources.

The government agency with the greatest ability to lay the groundwork for the development of more transmission lines has taken two steps recently, which should please advocates of renewable power.

In June, the Federal Energy Regulatory Commission (FERC) approved the Southwest Power Pool’s (SPP) transmission cost-allocation plan. FERC praised the plan, saying it would encourage investment in new transmission facilities, reduce congestion, efficiently integrate new resources in the region and accommodate growth in demand, while providing greater certainty of cost recovery.

SPP includes all or parts of Arkansas, Kansas, Louisiana, Missouri, Nebraska, New Mexico, Oklahoma and Texas. The so-called “highway/byway” proposal would rely on a regional emphasis in transmission planning, as opposed to the traditional approach that focuses on local reliability issues. It calls for costs to be allocated according to the voltage of new transmission facilities, creating a more equitable distribution of the cost burden for new transmission outlays across the region. It will assign costs of high-voltage transmission projects regionally and lower voltage projects locally, helping to ensure that only those who benefit from new facilities will have to pay for them.

For example, the costs of facilities operating at 300 kilovolts (kV) and above will be allocated 100 percent across the SPP region on a postage stamp basis. For costs of facilities operating above 100 kV and below 300 kV, allocation will be one-third on a regional postage stamp basis and two-thirds to the zone in which the facilities are located. Finally, the costs of facilities operating at or under 100 kV will be allocated fully to the zone in which the facilities are located.

Also in June, FERC issued a notice of proposed rulemaking (NOPR) for open-access transmission reforms. The NOPR goal is to establish a closer link between regional electric transmission planning and cost allocation to help ensure the construction of needed transmission facilities. It includes proposals to require transmission providers to establish a closer link between cost allocation and regional transmission planning and to account for state and federal laws, such as renewable-energy standards. It also would require neighboring transmission planning regions to improve their coordination with facilities proposed in adjacent regions.

Not surprisingly, renewable-power advocates were pleased. For example, the American Wind Energy Association praised FERC for establishing a policy that “gets transmission built” and for its “recognition of the need for grid planning principles that are designed to meet renewable-energy goals.”